Petrol drop drags retail sales down
Retail sales recorded their sharpest fall in more than a year last month dragged lower by a big decline for petrol stations, official figures showed today.
March saw a surprise 0.5% drop in volume sales on the previous month, almost wiping out a 0.6% surge seen in February, according to the Office for National Statistics (ONS).
Economists said it was likely to feed into a weak overall first quarter for the UK, with gross domestic product (GDP) figures due out next week, days before the General Election.
Retail sales excluding petrol stations were 0.2% higher, with clothing and footwear together with household goods categories seeing an improvement.
But the overall 0.5% decline was the worst since a fall of 1.7% seen in January last year.
Petrol stations saw a decline of 6.2%, the steepest fall since November 2009 excluding periods hit by fuel shortages in 2012 and heavy snowfall in 2009.
Year-on-year retail sales volumes were up 4.2%. For the first three months of 2015 they were 0.9% ahead of the previous quarter.
But it was a slowdown from the last three months of 2014 which had seen quarter-on-quarter growth of 2.2%, suggesting retail sales would make a lower contribution to GDP for the start of this year.
Average store prices fell 3.1% year-on-year, again led by petrol stations.
The ONS said the amount spent in retail in March was 0.7% higher on the year but 0.3% lower compared with February.
Alan Clarke of Scotiabank said: "It may well be that consumers maxed out before Christmas in a discount fuelled frenzy and the post-Christmas period is experiencing a pause for breath.
"The monthly data all point towards sluggish Q1 GDP next Tuesday, not the sort of reading that the coalition Government will be hoping for."
Vicky Redwood, chief UK economist at Capital Economics, said: "The 0.5% drop in retail sales volumes in March was certainly disappointing (the consensus forecast was a 0.4% rise), but not too much of a worry.
"The fall was driven by a drop in petrol sales, presumably reflecting drivers having already filled their tanks when petrol prices were at their low in February.
"It looks as though retail sales will provide a much smaller boost to overall GDP."